Related News

ECAs continue to favour fossil fuels over clean energy, data shows

Olam bags US$625mn shariah-compliant facility

EU makes fresh bid for OECD export credit fossil fuel ban

Trafigura upsizes samurai loans

JBIC and Japanese banks team up on ¥11bn Boeing transaction

MUFG Bank has hired Rob Ward as head of project finance and head of ESG finance for the Oceania region, effective immediately. It comes as the private and public sector in Japan faces increasing pressure to reduce its support for fossil fuel projects.

Ward joined MUFG in 2012 and since 2016 has led the bank’s advisory business in Oceania. He has also held director roles at RBS and ABN Amro, focusing on project finance. As the new head of project finance, MUFG will look to leverage Ward’s experience and leadership in the energy and infrastructure markets to further strengthen the bank’s business, reveals MUFG in a statement.

Based in Sydney, Ward will also take up the newly created position of head of ESG finance for Oceania. The role is designed to co-ordinate and build upon the bank’s ESG finance activities in the region, which include a range of products such as ESG loans and bonds, renewables project finance and emerging energy technologies.

“As the head of ESG finance, Rob will bring together the significant investment the bank has made both regionally and globally, to further help MUFG leverage its global network and meet the increasing demand for ESG financing and advise across our institutional customer base,” says Drew Riethmuller, head of global corporate and investment banking, Oceania, and to whom Ward will report.

The hire comes as MUFG finds itself in a sticky situation over its lending policy for coal plants. The bank updated its policy in May, stating that it will no longer provide financing for new coal-fired power generation projects after July 1, 2020. However, there are exceptions to that rule, if the plant is more technologically efficient and depending what the energy policies and circumstances of the host country are, for example.

Campaigners were quick to note that MUFG does not impose any deadlines for the phase-out of coal financing, meaning that the bank can continue to finance overseas coal projects if the policy deems them suitable far into the future. Indeed, as the average lifespan of a coal plant is 30 years, fossil fuel-based energy could be locked in for decades, contradicting the long-term goals of the global 2015 Paris agreement to keep greenhouse gas emissions at bay.

In fact, MUFG is one of the top lenders to coal plant developers. 307 commercial banks across the world have provided US$159bn in direct loans to coal plant developers since January 2017. The top three lenders are the Japanese giants Mizuho (US$16.8bn), MUFG (US$14.6bn) and SMBC (US$7.9bn), reveals research published at the end of last year by Urgewald, BankTrack and 30 partner NGOs.

When it comes to supporting fossil fuels more broadly, MUFG issued US$118.8bn to the industry across its lending and underwriting of debt and equity issuances from 2016-19, making it the sixth-largest financier of fossil fuels ahead of Mizuho and SMBC, according to a report by a group of NGOs.

When asked about what action MUFG and Ward will take to curb the bank’s lending to projects that do not align with the Paris agreement, a spokesperson tells GTR: “MUFG’s long-term mission to drive sustainable growth for both clients and the communities in which it operates has seen it committing a total sum of ¥20tn (US$188bn) into sustainability-related financing by 2030. It is already well ahead of schedule, having utilised 19% of this amount (¥3tn or US$35bn) in the first year (FY2019).” They add: “With Rob’s timely appointment to these roles, we are confident that he will not just enhance our project finance and renewables franchise in the region, but deepen our focus on advancing ESG initiatives together with clients and local communities.”